The 21st century got off to a dramatic start – with the stock market crash from 2000 to 2002, the terrorist attacks of 11 September 2001 and two military interventions in the Middle East. In Switzerland, the grounding of the Swissair Group in October 2001 reverberated throughout the worlds of politics and industry. Nevertheless, the trend towards global economic integration continued unabated. December 2001 saw China join the World Trade Organisation. The share of world trade in global economic output increased further, while the national capital markets gradually merged to form a single platform. The earth was getting flatter and flatter.
International regulation in the Anglo-American style gained a further foothold. The stock market crash even served to fuel this trend, accompanied as it was by a series of accounting scandals and calls for more effective control by the state. Enron and Worldcom in the United States, Comroad and Holzmann in Germany, and Parmalat in Italy were the most illustrious cases abroad. In Switzerland, poor accounting practices at medtech company Jomed, the Erb group, and the cantonal banks of Geneva and Waadt attracted their fair share of negative attention. Of major significance to the professional services industry was the “Enron case”, because when the American energy group collapsed, it was swiftly followed by its auditor Arthur Andersen, indicted for perverting the course of justice. And thus only the “Big Four” – PWC, KPMG, Ernst & Young and Deloitte – remained. With confidence in the auditing sector shaken, comprehensive global regulatory measures came as no surprise. The practice of providing both audit and advisory services to one and the same client was significantly restricted.
The Lehman Brothers affair in September 2008 set another shockwave in motion. The financial markets came close to seizing up altogether as once reputable financial institutions suddenly stopped being reliable counterparties. Thanks to a determined effort on the part of the central banks and various rescue packages, a complete collapse of the financial system was averted. Once again, the crisis triggered a surge of regulatory activity. This time, however, it barely affected the audit and advisory sector directly, as the industry had played no part in the emergence of the American real estate boom. Regulation of the financial sector did have indirect consequences, however. Banks and insurance companies were forced to modify their internal control systems, generating new contracts in the field of management consulting.
For Ernst & Young’s Swiss subsidiary – known as EY Switzerland since 2013 – the turbulent years since Enron have therefore been anything but a time of crisis and stagnation. Although the climate has become more volatile and ongoing regulation has prompted some painful adjustments, EY Switzerland has managed to grow without having to jettison its previous business model. Auditing remains the lifeblood of the company and this blood is still being enriched with expanding advisory services. Nothing has changed in terms of the fundamental objective either. EY Switzerland aims to meet the needs of its clients as effectively as possible, but on condition that auditing and consulting remain independent. EY Switzerland’s history began a hundred years ago as the subsidiary of a major Basel bank; today it is a large independent company with a self-assured presence in the market. And it is able to fulfil its function as a purveyor of trust and confidence better than ever before.
In 2001, the five giants of the auditing industry – PWC, Ernst & Young, KPMG, Deloitte and Arthur Andersen – held the lion’s share of the world market. But a year later, Arthur Andersen – a global company with 85,000 employees – literally imploded. What happened? Arthur Andersen LLP had been auditors to the American energy group Enron since the latter’s foundation in 1985. Enron operated pipelines and traded in gas and electricity. The group employed a staff of some 20,000 workers, generated turnover of more than a hundred billion dollars in the year 2000 and was voted “America’s Most Innovative Company” six years in a row by business magazine Fortune.
In 1998, the price of the Enron share rose by 89 percent, a year later by a further 58 percent. But alongside the swarm behaviour typically seen among investors during a stock market boom, it was “creative accounting” that was responsible for this immense increase. The group hid liabilities worth billions in subsidiaries with fantastic names such as Jedi, Raptor and Merlin, some of which had been omitted from the consolidated financial statements – an illegal practice. At the same time, it used computer-based models to overvalue certain difficult-to-assess long-term contracts with the aim of increasing disclosed earnings. Both practices made energy group Enron appear more profitable than it actually was. And its management profited personally because their variable salaries were linked to the performance of the share. The house of cards finally collapsed in April 2001, when Enron posted a profit despite all the detailed financial data pointing to losses. Forced to correct the figures, the management finally admitted to having declared inflated profits between 1995 and 2000. That spelled the beginning of the end. The share price fell to around zero and Enron was forced to file for insolvency in December 2001.
Auditors Arthur Andersen were dragged into the grave as well. How, though, was Enron able to manipulate its balance sheets for so long without the auditors noticing that anything was amiss? During questioning in the courtroom, Arthur Andersen’s auditors claimed to have been sceptical about Enron’s practice of not consolidating some of its subsidiaries. Despite their doubts, though, the Arthur Andersen partners dealing with Enron remained loyal to their client. It also came to light that Arthur Andersen had destroyed tonnes of files related to Enron and deleted the corresponding e-mails. It was this that led to the indictment for perverting the course of justice in May 2002. Around the entire globe, trust in the auditing company fell into the abyss. Ever more audit clients took their mandates elsewhere. Then, in June 2002, the company was charged with having committed a criminal offence in manipulating company documents. And although the courts revised this verdict three years later due to a lack of evidence, it was all irrelevant as Arthur Andersen had already ceased to exist.
The implosion of Andersen clearly demonstrates how heavily auditing companies rely on their reputation. Once the trust of the client base is lost, an auditor can find itself on the brink of extinction very quickly. In Arthur Andersen’s case, all the subsidiaries outside the United States were also affected as they were unable to survive without the international network with the United States as the principal market.
In Switzerland, Arthur Andersen employed around 750 staff. Its CEO was Prof. Peter Athanas, a tax expert who had gained his PhD under former ATAG board member and Professor of Tax Law Dr. Ernst Höhn at the University of St. Gallen before joining Arthur Andersen Switzerland. When asked about how he experienced the bad tidings arriving from America, Athanas replied: “It wasn’t just a wave of bad tidings – it was a veritable flood. Night after night, we in executive management would prepare for different scenarios ranging from ‘best case’ to ‘worst case’. And when we started to read the papers at 5 am the next day, the situation was always worse than our worst-case scenario. It was a disaster.” When it became clear that the parent company was not going to survive, Arthur Andersen Switzerland had to start the search for new partners. And there was no shortage of interested parties as the company enjoyed an excellent reputation in the business. For Urs Widmer, Chairman of ATAG’s Board of Directors, it was obvious that links should be forged with Arthur Andersen if possible. Such a business combination would “produce a real powerhouse with a broad base.” According to EY International supremo Rick Bobrow, a merger with the Andersen companies was Ernst & Young’s last opportunity for serious growth in Europe.
Andersen failed to respond to initial inquiries on the part of Ernst & Young Switzerland because at first they were involved in negotiations with KPMG at a European level. Although these talks reached an advanced stage, they became increasingly fraught with difficulties and ultimately failed. So Andersen returned to
Ernst & Young. In Switzerland, the pre-conditions for a “merger of equals” were non-existent: Ernst & Young, with around 1,800 employees, was vastly bigger than Arthur Andersen, which now found itself in a weak position due to the aborted negotiations with KPMG. “The normal thing to do would have been to say to Andersen: ‘take it or leave it’,” recalls Andreas Müller, one of Ernst & Young’s negotiators. “But Andersen’s employees were exceptional and the company had some very good clients. Our strategy was to try and really integrate these people into our company.” So the negotiations were very hard but fair, and once the monopolies commission gave the green light, Ernst & Young took over, as part of an asset deal, the necessary infrastructure but none of Andersen Switzerland’s liabilities. Of Arthur Andersen’s 84 international subsidiaries, 55 were incorporated into Ernst & Young. Most of Andersen’s other companies, including those in the United Kingdom, Spain and the Netherlands, joined forces with Deloitte.
In order to facilitate the success of the merger in Switzerland, senior managers at Arthur Andersen were brought into the top management echelons of Ernst & Young. Andreas Müller, who had already been appointed Chairman of the Board of Directors by the company’s Partners, declined this office in favour of Peter Athanas for the sake of managerial balance. Dr. Urs Widmer stepped down, having reached the designated internal age limit. The Ernst & Young Partners Peter Bühler, Ancillo Canepa, Stephan Hitz, Jürg Scheller, Dr. René Stauber and Andreas Müller (CFO) were joined on the Management Committee by former Arthur Andersen partners Stephan Kuhn and Ronald Sauser. Marcel Maglock remained CEO.
This arrangement did not last long, however. Barely a year after the merger, there was another change in senior management, this time perforce: Ernst & Young had been entrusted with the valuation of a number of participation certificates when a client delisted from the stock exchange. By chance, the CEO was able to access details of the proposed acquisition price and succeeded in making capital from this insider information. When the matter came to light in the course of a stock market review, Ernst & Young’s Board of Directors responded immediately, unanimously voting to discharge the CEO with immediate effect and by mutual agreement of both sides. Thus, a revolving door was set in motion: Athanas relinquished his position as Chairman to become the new CEO, while former CFO Andreas Müller finally took up his position as Chairman of the Board. From 2001 to 2003, the certified accountant and auditor also served as Chairman of the Swiss Institute of Certified Accountants and Tax Consultants. Eighteen months later, Marcel Maglock was convicted of insider-dealing offences. Under the leadership of Peter Athanas and Andreas Müller, a new whole emerged from the diverse cultures of Ernst & Young and Arthur Andersen. ATAG had always been a skills-driven organisation which defined itself through the excellent qualifications of its staff. Peider Mengiardi is on record as saying that the “intellectual capabilities and character attributes” of employees are critical qualities in the sector. Furthermore, ATAG was a firm with a regional presence that could look back on an illustrious history in the Swiss market, with clients ranging from small companies to multinationals. In international terms, it was a member of the still somewhat loose-knit Ernst & Young network.
By contrast, as the subsidiary of an American parent, Arthur Andersen Switzerland was part of a uniformly structured international firm whose employees had been subjected to a standardised training regimen the world over. Indeed, uniform training and a certain single-mindedness earned them the nickname “Andersen Androids” in the business. Thus, skills and ability were key elements at Arthur Andersen as well. The major distinction to ATAG, besides international uniformity, was Arthur Andersen’s more aggressive approach to marketing.
“The strong market orientation of Arthur Andersen’s people was the ideal complement to the steadfastness and expertise of the staff at ATAG,” recalls Professor Athanas. With the integration of Arthur Andersen into a new and bigger Ernst & Young Switzerland complete, it was now time to redesign the role of the Partners in the company: as the most expensive workers in the company, it was their job to delegate tasks rather than carry them out themselves. At the same time, this made it possible to motivate lower-level management staff by entrusting them with more challenging duties. By the same token, Partners were expected always to liaise with clients themselves and not reduce their role to a mere managerial function.
The corporate failures of the early 2000s were a wake-up call to the authorities. Public confidence in the corporate governance of companies, auditors and the capital market per se (between March 2000 and July 2002, US market capitalisation fell by a half) was waning and in need of restoration. To this end, the US Senators Paul Sarbanes and Michael Oxley set to work on the Sarbanes-Oxley Act (SOX), which was completed within six months and came into force with the signature of George W. Bush on 30 July 2002. The SOX Act constituted the most far-reaching regulatory reform for the capital market, the auditing sector and corporate governance in the United States since the laws passed in the 1930s in response to the world economic crisis.
The state now began to intervene in matters affecting auditing. The SOX Act tightened requirements with regard to the independence of auditors to a perceptible degree. The parallel provision of a variety of non-audit services to listed corporate clients – a practice the SEC had begun to restrict back in the 1990s – was now subjected to stricter prohibition. Since then, the executive boards of companies have been required to establish an audit committee whose job is to pre-approve all the services provided by the audit company. Also, the leading partner of an audit mandate must be switched out every seven years, and auditors are duty-bound to assess a company’s internal control system. Ultimately, the establishment of the Public Company Accounting Oversight Board (PCAOB) initiated the transition in the United States from self-regulation to state supervision in the auditing sector, since PCAOB supervises every company that provides audit services to companies listed on US exchanges.
The international resonance of the SOX Act was enormous. It was followed in 2006 by the Eighth Council Directive, also known as EuroSox. Switzerland followed suit as well. In 2007 the Swiss Code of Obligations was amended and the Swiss Audit Supervision Act (RAG) came into force. Since then, it has been the size of a Swiss company rather than its legal form that determines whether it should be subject to a full (regular) statutory audit or a limited statutory examination of its books. The aim of the limited statutory examination is to relieve SMEs of some of the administrative and financial burden of a full audit. With the establishment of the Swiss Federal Audit Oversight Authority (RAB), Switzerland put in place its counterpart to PCAOB. From now on, not only the auditors of banks but also auditing companies with mandates to review the books of public companies would fall under state supervision. Although this served to limit the self-regulation of the sector advocated the Swiss Institute of Certified Public Accountants and Tax Consultants, the latter organisation continues to play a significant role in regulating professional practices and conduct. The requirements in terms of auditor independence were tightened in Switzerland too, with the regulations governing the provision of both audit and advisory services to one and the same client becoming more clearly defined. As long as an auditing company refrains from reviewing circumstances that it has helped to bring about itself through the provision of advisory services, the services are compatible with the requirements set out for small and medium-sized enterprises. Listed companies, however, usually qualify as either an audit client or an advisory client, and this has led to a certain decoupling of auditing from consulting that can lead to problems. Since audit mandates are much less lucrative – albeit riskier – than advisory mandates, audit companies now need to evaluate whether they want to provide their major clients with auditing services or consulting services.
All told, the regulation benefited the sector as it served to bolster the independence of auditors and underscore the importance of auditing companies in the long term. Although the SOX Act did result in short-term expenditure to adapt to the new regulations, and Ernst & Young was obliged – due to independence commitments – to part ways with the excellent pension fund consultancy firm Libera that it had acquired at the start of the 1990s, the introduction by listed companies of internal controls gave rise to new advisory mandates. Ernst & Young was able to retain its multi-disciplinary range of products and services. An explicit decision was made to continue providing auditing, risk management, tax and legal advisory, transaction support and accounting services under a single roof – always according to the principle, however, that: “We don’t audit what we advise.”
What is more, Ernst & Young decided to confront the turbulent times in the auditing sector by making a quality pledge. In an interview with EY Global CEO Rick Bobrow published in the Annual Report 2001/2002, it was evidently a matter of “further enhancing the quality of the services we provide,” quality having been the mainstay of Ernst & Young’s business mandate since time immemorial.
The company slogan was changed from “From Thought to Finish” to “Quality in Everything We Do”. And in order to guarantee these new quality aspirations, the company tightened its internal guidelines. In 2005, the company published a global Code of Conduct and has since then monitored the formal independence of its employees. The company fully intended to keep its explicit promise to the market, namely to create trust and exploit it as an added value. Barely a year after Switzerland had implemented its new auditing legislation, US investment bankers Lehman Brothers filed for bankruptcy, igniting the spark that would lead to an economic crisis, the repercussions of which are still being felt today. At Ernst & Young, the diminishing consulting budgets of corporate clients began to leave a dent; sales and personnel fell in 2010 and 2011. On one occasion, salaries were even paid out early for fear of an impending banking collapse.
The crisis also fuelled debate on the role of auditing in general. In the EU, regulations were tightened yet further in 2014. Among other stipulations, major groups were now obliged to change not only the team auditing them after ten or twenty years, but the audit firm itself, the intention being to soften up the de facto “Big Four” oligopoly. A fact often overlooked, however, is that these four major players, which have evolved through numerous mergers, are the only organisations that actually possess global networks big enough to handle auditing mandates involving major international corporate clients.
For Ernst & Young, the integration of Arthur Andersen was a happy consequence of the turbulent 2000s. But there was one far less happy outcome, too: Ernst & Young was confronted with a huge claim for damages arising out of the affair surrounding the Cantonal Bank of Geneva, which was saved from ruin only with the financial support of the canton itself.
Liability litigation was nothing new in this sector; as the auditing department has the “deepest pockets” of all corporate bodies, claims are very often brought against the audit companies when their clients become insolvent. As early as the inter-war years, Allgemeine Treuhand AG established reserves as provision for such cases, although insurance later replaced this practice. Towards the end of the 20th century, however, the number of claims brought against auditing companies increased to the point where, by 2005, suits to the tune of more than $ 50 billion were pending against the “Big Four”. That sum would have been enough to sink the entire industry without trace and several times over.
The same applied to Ernst & Young in the Cantonal Bank of Geneva (BCGE) case. On 28 February 2003, the canton of Geneva brought a civil case against the auditing company, claiming a total of CHF 3,096,407,196. How could it come to this? The result of
a merger in 1994 between Caisse d’épargne de la République et canton de Genève and Banque hypothécaire du canton de Genève, the BCGE was in trouble right from the outset, even though its balance sheets between 1996 and 1998 appeared impeccable, as it had somehow managed to offload its non-performing loans while dispensing with corresponding provisions. Ultimately, the bank had to be rescued, with a cantonal rescue fund taking up toxic papers worth CHF 5 billion. As a result, lawsuits were filed against the bank’s chairman and management, and against two of Ernst & Young’s auditors. It was claimed that they had breached their contractual obligations during the audit. According to both internal and external estimates, the risk of a guilty verdict was high, and for this reason the company strove to achieve an out-of-court settlement. The case hung like the Sword of Damocles over the company. “Some people didn’t want to become Partners for fear of having to hand over their own capital to the plaintiffs straight away,” recalls Bruno Chiomento. “And the former Arthur Andersen employees knew only too well that a professional services firm can find itself staring into the abyss in no time at all.” Chiomento had taken over the roles of CEO and Country Managing Partner from Peter Athanas at the start of 2009. Originally from Basel, he had, after graduating in economics, started out as an auditor at ATAG at the end of the 1980s and earned a Certified Public Accountant (CPA) diploma in New York. In January 2012, he travelled to Geneva to close the settlement negotiations with the plaintiffs. After years of legal squabbling, the parties agreed on a settlement of CHF 110 million. In return, the canton of Geneva dropped all civil and criminal claims against the auditing company. With the help of all parties involved, the company managed to stump up the settlement amount without wiping out the assets of the Partners. Ernst & Young was able to fall back on insurance covering its international network and a reserve dating back to a period before 1998.
The appointment of a new CEO heralded changes in the personnel of the other executive bodies, too. Alongside Chiomento,
Michael Riesen, Thomas Stenz, Stefan Amstad, Dominik Bürgy, Louis Siegrist and Willy Hofstetter sat on the Management Committee of Ernst & Young AG from 2009 on. Thomas Stenz succeeded Andreas Müller as Chairman of the Board of Directors of ATAG Ernst & Young Holding AG. The former Arthur Andersen partner was also a member of the board of the Swiss Institute of Certified Public Accountants and Tax Consultants and a member of the Swiss GAAP FER Expert Commission. The two other Board members were Hans Isler and Georg Graf Waldersee.
The Cantonal Bank of Geneva case cast a long shadow over the ongoing process towards an integrated, globalised company. And in this regard, 2008 marked a significant change in direction: a total of 87 national subsidiaries within the international network came together to form a single operational unit under the name EMEIA (Europe, Middle East, India, Africa). The regions “Americas”, “Asia & Pacific” and “Japan” were also created. Initial plans to forge a capital-based combination between the Swiss company ATAG Ernst & Young and the Europe-wide EY Europe LLP were ultimately scrapped because the company wanted to prevent any liabilities arising from the legal dispute with the Cantonal Bank of Geneva passing to the international company. In the end, the Swiss company merely transferred to EY Europe LLP its usufructuary right to the shares held by the Partner pool. As such, the capital remained in the hands of the Swiss Partners while control passed to EMEIA.
With this one step, Ernst & Young became the most internationally integrated audit and advisory company of the “Big Four”. The Swiss Partners became EMEIA Partners, and a global incentive system was introduced. EMEIA brought together some 62,000 employees at its foundation; the headcount today is 112,871. With current sales of $ 11,758,000 (EY Global: $ 29,626,000), it is by far the biggest of EY Global’s four regions. Various operating units exist within EMEIA. The Financial Service Organisation (FSO) brought together all European employees working in the fields of banking, asset management and insurance under a single roof. In addition, a further twelve regions, including GSA (Germany, Switzerland, Austria), cover the other sectors. At incorporation, the Swiss company was the sixth biggest unit within EMEIA, which it still is today, as well as occupying 11th place globally.
International integration made it possible to standardize quality levels on a global basis. “Delivering seamless, consistent, high-quality client service, worldwide” was how the market pledge was worded in the Annual Report 2010. The economies of scale provided by an internationally integrated company were clear for all to see. For the international subsidiaries, though, integration also meant a decline in national sovereignty. “Kill the countries” was the mantra of the Chief Operating Officer of EY Global, John Ferraro. For example, increasingly centralised powers of authority meant that the Swiss Partners were no longer able to choose their own CEO. Bruno Chiomento was the last elected Chairman of the Management Committee; his successor and current CEO, Marcel Stalder, was installed by the executive body of EMEIA, albeit following in-depth sounding-out among the Partners. The Swiss Partners were compensated for their loss of self-determination, as the former ATAG was the biggest net exporter of fees in the EMEIA network. Many of Ernst & Young’s major clients were domiciled in Switzerland despite predominantly operating in foreign markets. So although client service expenditure was incurred at home in Switzerland, the lion’s share of the fees were generated in other countries. In order to resolve this issue, compensation payments were agreed for the Swiss Partners – a “special status” for the Swiss company that is honoured to this day in the EMEIA network.
The sub-prime crisis had substantial albeit indirect consequences for the auditing and advisory industries, followed as it was by a veritable flood of new regulations in the financial sector. Implemented by Barack Obama in June 2010, the 541-article strong Dodd-Frank Act aimed to re-establish the stability of the financial market and protect taxpayers from the “too big to fail” problem. Numerous new laws were passed in Europe, too. The institutions of the European System for Financial Supervision (EFSF) strengthened supervisory powers over the financial market, and Basel III introduced international standards applicable to new equity capital guidelines. In Switzerland, financial accounting controls were tightened with the foundation in 2009 of the Swiss Financial Market Supervisory Authority (FINMA). With the regulatory framework still in flux and the central banks maintaining record-low interest rates in an effort to combat the crisis, financial service providers were faced with serious challenges.
In recent years, however, the changes in the financial sector have become major drivers of growth for Ernst & Young. As early as 2007, the company had begun to shift its focus towards the advisory service. So seven years after selling its classic consulting business to Cap Gemini, Ernst & Young began to reinforce the advisory side of business again. “If we want to grow again as a company,” pronounced Chairman of the Board of Directors Thomas Stenz in his address to the Management Committee in spring 2010 after two lean years in crisis, “the greatest potential to do that lies in advisory.”
And the company succeeded in exploiting that potential: since then, the advisory segment has grown tremendously, sometimes at a rate of more than 20 percent a year, whereas tax and legal services have recorded only single-digit growth and auditing has stagnated owing to the saturation of the market. While, in 2006, auditing accounted for almost two-thirds of Ernst & Young’s fee revenues, today the figure has dropped to around 40 percent, with Advisory and Tax and Legal each making up around a third of turnover.
It was above all FSO Advisory, i.e. consulting for financial service providers, that really sky-rocketed, quadrupling its sales figures between 2010 and 2015.
Besides compliance advisory services, the field of digital transformation began to take centre stage, and EY began to expand its skill-set in this area. In France, Bluestone Consulting, a leading consultancy in the field of big-data analysis, was integrated into EY, while in the United Kingdom, Seren, an advisory firm for digital design, teamed up with Ernst & Young. Switzerland’s turn for expansion came in 2015, when around 20 SAP consultants from Avenzia AG joined Ernst & Young AG’s Financial Advisory unit. The company aims to bolster its advisory operations in the field of digitalisation through further acquisitions and investment in human resources.
Against this backdrop, it perhaps comes as no surprise that Bruno Chiomento’s successor as CEO was the Head of Financial Services. Marcel Stalder has been CEO of EY Switzerland since 1 July 2016. Bruno Chiomento moved to become Chairman of the Board of Directors. Stalder began his career in 1986 as an apprentice at UBS before going on to study business management and to join ATAG Ernst & Young in 1996. He also had a stint at EY in the United States, where he gained his Certified Public Accountant diploma. In 2005, he became a Partner at Ernst & Young Switzerland, initially heading the Insurance section and later the Financial Services business. In addition to Marcel Stalder, the new Management Committee comprises the following ten Partners: Louis Siegrist, Andreas Blumer, Stefan Marc Schmid, Alessandro Miolo, Patrick Schwaller, Matthias Bünte, Adrian Widmer, Daniel Gentsch, Thomas Brotzer and Stefan Rösch-Rütsche. Alongside Bruno Chiomento and Marcel Stalder, the Members of the Board of Directors are Philip Robinson (Representative of Industrial Companies), Andreas Blumer (Representative of Financial Services) and Laurent Bludzien (Representative of Western Switzerland and Ticino). The Germany Switzerland Austria (GSA) and Financial Services Organisation (FSO) departments now enjoy more equal representation in the extended executive bodies with the aim of enabling closer cooperation between these two entities in Switzerland. As the saying goes: One EY.
The new millennium brought great change in terms of HR policy as well as business. In particular, the number of women employees increased. Switzerland’s trust and audit industry had long been the preserve of men, and it was not until 1980 that the first woman became a certified accountant. The sector slowly acquired a female presence in the course of the 1990s, with 17.3 percent of certificates for accounting, tax or trust experts awarded to women in 1994. By 2015, 29 percent of successful candidates for the chartered accountancy certificate were women. Women broke into the profession particularly late in Switzerland. In the United States, significantly more women started working in the audit and advisory sectors in the 1980s, while the profession was dominated by women in some Eastern European countries. This does not mean that no women at all used to be employed in trust companies. According to the Allgemeine Treuhand’s earliest lists relating to the composition of its workforce, 31 people, including “11 ladies”, were working at the Basel office in 1928. The Zurich office, which was still small at the time, had six employees, including “two office girls and one apprentice girl”. Women were employed as office assistants. With the advent of punched card systems, the “card puncher” and “verifier” joined the secretary as conventional occupations for women. However, women only rarely occupied management positions in those days – a state of affairs that was to continue for many years to come. Just one woman was invited to the first ATAG Partners’ Meeting in 1992, which was enough to justify the salutation in the invitation, which read “Dear Ms Salvi, Dear Colleagues”. Three women became Partners in the company at the time of the partner buy-out in 1998.
The situation at EY Switzerland began to change in the 21st century. The visual imagery in the report for the financial year 2001 emphasised the portrayal of male and female employees as equals for the first time. Just a few years later, an attempt was made to give women increasingly responsible roles with the launch of the GROW (Growth and Retention of Women) initiative. The idea was to make Ernst & Young a more attractive employer for women by introducing flexible working time models, a mentoring system and free advice on childcare. In the financial year 2016, 40 percent of employees were women, and women held 12.5 percent of all management positions. Today, 19 of the 142 Partners are women.
The workforce has not only become more heterogeneous in terms of gender, but also in terms of nationality: people from over 60 different countries now work at EY Switzerland. More than one third of employees do not hold a Swiss passport. This diversification of the company workforce certainly reflects the stiff competition for qualified labour: as the minutes of a 2006 Partners’ Meeting stated, “Especially in Europe we face a war for talent with a limited pool of skilled people and a strikingly more diverse labour market.”
The working environment of the company’s employees has also changed over time. In Zurich, the previous three locations at Bleicherweg (former “ATAG House”), Stauffacherstrasse and Brandschenkestrasse were consolidated at a new address in 2011. A total of 1,100 employees relocated to the “platform”, a seven-storey building, built to energy consumption standards protected by Swiss law, next to Zurich’s Prime Tower at the Hardbrücke railway station. The flexible hoteling system has replaced the conventional office: many employees work at open, non-personalised workspaces, with booths available for making phone calls. The “platform” currently serves as the workplace for 1,489 men and women – 56 percent of the EY Switzerland workforce.
The contrast with the early days of EY Switzerland could not be more marked. One hundred years ago, a couple of Swiss men in suits went about their business in a room at Basler Handelsbank, using pencils, fountain pens, typewriters and plenty of paper. Now and again they made a phone call, which cost an absolute fortune. Today, men and women from different countries work together in an open-plan environment where relaxed manners and flat hierarchies are the order of the day. Employees at all levels address one another with familiarity, and state-of-the-art communication tools enable the ongoing exchange of knowledge on the international stage in real time. In keeping with this trend, EY has been using the slogan “Building a better working world” since 2013.